UFC eyes markets overseas

The Sports Business Journal is running “The Fight Issue” this week which includes articles in the world of combat sports. Its “In-Depth” article features the UFC and its global expansion efforts.

The report states the UFC will have seven shows outside of North America: Brazil (twice), Japan, Australia, Sweden, England and Macau.

The article focuses on the UFC’s popularity in Brazil citing UFC 134’s success with the event selling out in 74 minutes and 35 million viewers watching the show on Rede TV. Also, TUF: Brazil is garnering an average of 10 million viewers on Brazil network Globo according to the SBJ. The origins of Brazilian Jiu Jitsu and the national pride it has for its Brazilian-born fighters is a reason for its success.

With its global strategy, the UFC is refraining from selling its content to “pan-regional channels” which carry a variety of sports but don’t place them in front of a broader base of sports fans. The article uses Eurosport as an example of this type of channel. The UFC would rather be “relevant within what the dominant sport is in that market,” Lorenzo Fertitta told the SBJ. An example brought up in the article was the UFC’s move in India. The UFC will have two seasons of a localized “TUF: India” and its deal in India puts the UFC in a prime TV spot after the nation’s most popular sport, cricket.

Some other takeaways from the article:

– Lorenzo Fertitta indicated the UFC could do up to 20 events outside North America next year.

– There is no set strategy on China, although it hopes to gain perspective with its show in Macau this November.

– Revenue outside North America will represent about 10 percent of the UFC’s business. Fertitta indicated that he spends 65 percent of his time focusing on international expansion.

Payout Perspective:

Most following the sport have already recognized the UFC’s push to enter into new markets outside of North America. It’s a positive for the sport overall as more people will become accustomed to it and accept it as a sport. For the UFC, it’s an opportunity to grow its product and all that comes with it. The article mentions that once it has established a presence in a market, it can implement the ancillary businesses that can come with expansion such as licensing and merchandise, equipment, gyms, etc.

It will be interesting to see the success of the product in India and China. These two markets are very important for the UFC based on the sheer number of individuals in the respective companies. The initial TV deal in India should help garner fans of the sport and TUF: India should do well based on the numbers of the Brazilian version. No word on a China TV deal as of yet, but it looks like November’s Macau card will be big from a business standpoint.

Fertitta indicated that he would like “up to 20” events next year outside of North America. It will be interesting to see how this would be juggled considering the vast number of events going on in North America as well. This would mean cultivating fighters or relying on local fighters to fill up cards. It appears that the UFC acknowledges it may take a loss with some of the events but the primary goal is to mark its presence.